Axie Infinity [AXS] gearing up for a rally but do its buyers have enough strength
Disclaimer: The findings of the following analysis are the sole opinions of the writer and should not be considered investment advice.
The crypto market has been in a strong downtrend over the past week but saw a sizeable bounce in the past few hours of trading. Bitcoin led the charge and saw a short-term rally from $20.5k to $22.8k. This 10% move upward spurred many altcoins to also have a bullish break. Axie Infinity also posted decent gains from the $12.6 lows of the previous day to reach resistance at $16.2. Can the buyers maintain this pressure, or was it a pullback before another push lower?
AXS- 1 Hour Chart
The hourly price chart showed a downtrend for AXS in the past few days, characterized by a series of lower highs and lower lows. Two of the most recent lower highs are at $15.41 and $16.17 (white). Moreover, the $15.4 area (cyan box) represents an area of supply that could have been flipped to demand in the past few hours of trading.
The rally from $13 to $16.2 broke above this supply zone and threatened to flip the market structure to bullish. A bullish bias would be warranted if the buyers can defend the $14.95 mark and force AXS back above the $16.17 mark.
The Fibonacci retracement levels (pale yellow) plotted showed the 38.2% retracement level at $16.24, adding confluence to this area of resistance.
Rationale
The RSI crept above the neutral 50 line the previous day. Recent trading hours forced another surge higher to 70 to show short-term momentum to be strongly bullish. The OBV also saw a spike upward to indicate significant buying volume behind the AXS rally.
The DMI showed a short-term uptrend to be in progress. Both the ADX (yellow) and the +DI (green) were above the 20 level.
Conclusion
The indicators showed bullishness behind AXS, but the price action remained inconclusive. A move past $16.24 could see Axie Infinity climb toward the $19 mark. Meanwhile, a move below $14.95 would indicate that the rally had ended.
